assessing oil refineries in ontario - mpac · • aerospace manufacturing • mining operations •...

MARKET VALUATION REPORT

ASSESSING OIL REFINERIES IN ONTARIO

2016 BASE YEAR

Effective January 31 2016

January 31 2016

The Municipal Property Assessment Corporation (MPAC) has published Market Valuation

Reports for the following industries

bull aerospace manufacturing

bull mining operations

bull chemical manufacturing

bull food processing

bull oil refineries

bull pharmaceutical manufacturing

These Market V aluation Reports share sector level market an alytics and are intended to provide

clarity and transparency as to how property types in the above mentioned industries will be

assessed for the 2016 province-wide Assessment Update MPAC reserves the right to amend

the Market Valuation Reports as appropriate Updates will be posted on wwwmpacca

Antoni Wisniowski Rose McLean MIMA President and Chief Administrative Officer Chief Operating Officer

copy Municipal Property Assessment Corporation ndash Effective January 31 2016 1

Acknowledgements

As part of the preparation of the Market Valuation Reports MPAC consulted with affected

property taxpayers municipalities and representatives MPAC engaged the International

Property Tax Institute as an independent facilitator to undertake consultation sessions which

included the following industries

aerospace manufacturing

mining operations

chemical manufacturing

food processing

oil refineries

pharmaceutical manufacturing

MPAC would like to acknowledge and thank the following parties who participated in the

consultation process through industry-specific forums (November 2015ndashJanuary 2016)

Township of Terrace Bay

City of Thunder Bay

Town of Espanola

Township of James

Town of Fort Frances

City of Mississauga

Town of Marathon

City of Sarnia

City of North Bay

St Clair Township

City of Cambridge

City of Sault Ste Marie

City of Toronto

Town of Whitchurch-Stouffville

City of Guelph

Town of Milton

Town of Oakville

City of St Catharines

Region of Durham

Town of Ingersoll

County of Oxford

City of Brampton


City of Brampton

City of Guelph

Matachewan Township

Greater Sudbury

Tembec

Resolute Forest Products

Aditya Birla

Domtar

Ontario Mining Association

Goldcorp Canada Ltd

Unimin Canada Ltd

Sudbury Integrated Nickel Operation (a Glencore Company)

Primero Mining Corp

Imperial

Suncor

Shell Canada

Altus Group

Nova Chemicals

Gerdau Corporation

ASW Steel Inc

Max Aicher North America

Taylor Steel

Ivaco Rolling Mills LP

ArcelorMittal Dofasco Inc

Hamilton Specialty Bar

DJ Glavanizing

Fisher Canada Stainless Steel

Sandvik Materials Technology

Valco Manufacturing Inc

Welded Tube of Canada Corp

Associated Tube Industries

US Steel Canada Inc

Tenaris Algoma Tubes In

Sanofi Pasteur

GlaxoSmithKline

Purdue Pharma

Toyota Motor Manufacturing Canada Inc


Ford Motor Company of Canada

Honda Canada Inc

General Motors of Canada Ltd

Fiat Chrysler Automotives Canada Inc

Fiat Chrysler Automotives US LLC

Magna International Inc

Canadian Mist

Constellation Brands

Arnprior Aerospace

AEC Property Tax Solutions

Walker West Longo LLP

DuCharme McMillen amp Associates Inc

Nixon Fleet amp Poole LLP

Municipal Finance Officers Association of Ontario

Municipal Tax Equity Consultants Inc

James Petrin Property Assessment Services

Ryan ULC

MinsterLaw

PS JOHNSON Valuation Consultants Ltd

Altus Group Ltd

Carrel + Partners LLP

PS Johnson Legal Services

International Property Tax Institute

Equitable Value Inc

Nixon Fleet and Poole

Aird amp Berlis LLP

Cushman and Wakefield

Yeoman amp Company

Prestige Property Tax Specialists

Conway Davis Gryski

Kingmont Consulting

We also acknowledge those property owners who provided information submissions as part of

MPrsquos formal information request


Table of Contents

ACKNOWLEDGEMENTS 2

INTRODUCTION 7

SPECIAL PURPOSE BUSINESS PROPERTY ASSESSMENT REVIEW AND ADVANCE DISCLOSURE

8

THREE LEVELS OF ADVANCE DISCLOSURE 9

HOW TO BEST USE THIS REPORT 9

DESCRIPTION OF THE SUBJECT PROPERTIES 11

MANUFACTURING SECTORS 11

INVENTORY OF SUBJECT PROPERTIES 12

LARGE PETROLEUM REFINING PLANTS IN ONTARIO 12

RESPONSIBILITY OF MPAC 13

ROLE OF THE ASSESSOR 13

APPRAISAL THEORY 15

HIGHEST AND BEST USE 15

HOW TO DERIVE CURRENT VALUE 16

HOW TO DERIVE CURRENT VALUES FOR THE SUBJECT PROPERTIES 16

HOW THE SUBJECT PROPERTIES WILL BE ASSESSED 19

HOW MPAC WILL DERIVE THE CURRENT VALUES OF THE SUBJECT PROPERTIES 19

PRELIMINARY 2016 CURRENT VALUE PARAMETERS 33

REPRODUCTION COST NEW 33

REPLACEMENT COST NEW 33

FUNCTIONAL OBSOLESCENCE ndash EXCESS CAPITAL COSTS 33

PHYSICAL DETERIORATION 33

FUNCTIONAL OBSOLESCENCE ndash EXCESS OPERATING COSTS 34


EXTERNAL OBSOLESCENCE 34

COMPARISON BETWEEN 2012 AND 2016 CURRENT VALUE PARAMETERS 35

STEPS AN OWNER CAN TAKE TO HELP AN ASSESSOR 36

PROPERTY INSPECTIONS 36

ADDITIONAL INFORMATION 36

ITERATIVE DISCUSSIONS 37

NEXT STEPS 37

CANADIAN UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL COMPLIANCE 38

SCHEDULE A ndash ANALYSIS OF ECONOMIC OBSOLESCENCE ONTARIO OIL REFINERIES

SCHEDULE B ndash USEFUL LIFE TABLE

FOOT RATES WERE DERIVED (FULL REPORT)

SCHEDULE C ndash COST ANALYTICS HOW PRELIMINARY REPLACEMENT COST NEW PER SQUARE


builtrdquo1

Introduction

The Municipal Property Assessment Corporation (MPAC) ndash wwwmpacca ndash is responsible for

accurately assessing and classifying property in Ontario for the purposes of municipal and

education taxation

In Ontario property assessments are updated on the basis of a four-year assessment cycle The

next province-wide Assessment Update will take place in 2016 when MPAC will update the

assessments of Ontariorsquos more than five million properties to reflect the legislated valuation

date of January 1 2016 Assessments updated for the 2016 base year are in effect for the

2017ndash2020 property tax years Ontariorsquos assessment phase-in program prescribes that

assessment increases are phased in over a four-year period Any decreases in assessment are

applied immediately

Achieving an accurate valuation of large special purpose industrial properties such as oil

refining properties for property tax purposes is challenging due to the size and specialized

nature of the properties concerned and the fact that very few if any of them are bought sold

or leased in the market on a regular basis

For that reason it is important to ensure that the valuation methodology applied is capable of

providing a realistic estimate of current value at the relevant valuation date and in turn

enables all stakeholders to understand the valuation process and have confidence in the

fairness and consistency of its outcome

This Market Valuation Report (MVR) has been prepared for the benefit of MPAC assessors

property owners and their representatives municipalities and their representatives

Assessment Review Board members provincial officials and the general public

It should be noted that ldquolargerdquo in the context of industrial properties means a property that

falls within the definition of the ldquoLarge Industrial Property lassrdquo contained in section 14 (1) of

Ontario Regulation 28298 In general this refers to an industrial property in excess of 125000

square feet in terms of ldquoexterior measured areardquo

The following definitions of ldquospecial purpose propertiesrdquo may be helpful in reviewing this MVR

ldquo limited market property with a unique physical design special construction materials

or layout that restricts its utility to the use for which it was

1 Dictionary of Real Estate Appraisal Fifth Edition (Appraisal Institute 2010)


r otherwiserdquo2

iqueness arising fr

ldquoA property that is rarely if ever sold in the market except by way of sale of the business

or entity of which it is part due to the un om its specialized nature and

design its configuration size location o

Special purpose properties are likely to have the following characteristics

They are unique in improvements design layout size construction materials andor

building services that facilitate one or a limited number of uses

Generally contain machines and machine fittings that are designed to facilitate one

purpose

Adaptation to other uses is typically challenging requiring significant alterations and

rarely finding economically viable uses for all of the improvements

There are limited market possibilities except as a going concern business

They typically have specialized building services

They tend to serve large market areas that are more regional national or international

in scope

The expansive geographic scope of these properties typically requires research of

regional national or international data to support a market value analysis

Understanding the ldquomarketrdquo for special purpose properties also requires understanding

of the industry in which it operates (ie the nature condition and financial health of the

potential buyers and sellers)

Special Purpose Bus iness Property Assessment Review and Advance Di sclosure

MPrsquos disclosure efforts support one of the key objectives of MPrsquos 2013ndash2016 Strategic

Plan to deliver fair and accurate 2016 assessed values and align with the recommendations

made in the 2013 Ministry of Financersquos Special Purpose Business Property Assessment Review

(SPBPAR)

The SPBPAR focuses on the assessment of specialized and unique types of business properties

that are not commonly bought and sold and often involve complex assessment methodologies

As part of the review process feedback was gathered from municipalities MPAC the

2 ldquoGlossaryrdquo International Valuation Standards ouncil last modified January 1 2016

http httpwwwivscorgstandardsglossary


Level Title Description

1 Methodology Guides

Market Valuation 2

Reports

Property Specific 3

Valuation Information

Comprehensive guides that explain assessment methodology

Comprehensive guides that explain how methodology was applied to

value properties for the 2016 Assessment Update

Detailed information that is available through secure access only or

upon written request from taxpayers representatives and

municipalities

Assessment Review Board (ARB) and business taxpayer representatives The recommendations

outlined in the SPBPAR promote changes necessary to improve the assessment of large and

special purpose properties and generally the property assessment system in Ontario You may

access the full report here

The purpose of this MVR is to continue iterative discussions with taxpayers municipalities and

key experts and to begin to act upon the Ontario Governmentrsquos recommendations under the

category of Advance Disclosure and Assessment Methodologies

Three L evels of Advance Disclosure

There are three levels of Advance Disclosure

There are no discrete current values shared at the first two levels of Advance Disclosure

The Property Specific Valuation Information for each of the oil refining properties will be

provided at Level 3 of Advance Disclosure where property taxpayers municipalities and their

respective representatives will be able to understand and review how the current values for

each of the oil refining properties were calculated

How to Best Use This Report

This report encompasses Level 2 of Advance Disclosure and is best reviewed in association with

the Methodology Guide for oil refineries

The Methodology Guide offers a comprehensive overview of the assessment procedures MPAC

should carry out to arrive at estimates in current value for oil refining properties


This MVR will share and discuss the data parameters and calculations that MPAC intends to rely

upon to determine the assessed values for all of the oil refining properties in Ontario

Any of the data parameters and calculations contained herein should be viewed as preliminary

and subject to revision in the event that additional information is disclosed by any of the

parties

Additional information has been included as schedules

Schedule A refers to the economicexternal obsolescence report and Schedule B includes the

useful life table

Please note a report containing market valuation parameters associated with the land values

will be made available as soon as possible


Description of the Subject Properties

Manufacturing Sectors

There is one broad category that the subject properties fall within

petroleum refining

Petroleum Refining

ldquoThis industry refines crude petroleum through cracking and distillation to produce gasoline

diesel fuels and other fuel oilsrdquo3

The primary activities of this industry are

production of gasoline

production of diesel fuels

production of fuel oil

production of aviation fuel

production of heating oil

production of liquefied petroleum gases4

The data parameters and calculations contained in this report are applicable to all properties

identified in the petroleum refining category An inventory list is provided on the following

page

This report will focus on the main petroleum refining plants in Ontario with no discretion based

on total building floor area Most of the properties on the list exceed a total floor area of

125000 square feet however due to the unique nature of the petroleum refining process it

was considered important to also include some smaller properties on the list The 125000

square foot size benchmark is consistent with the description of properties included in the

Large Industrial Property Class as defined in Ontario Regulation 28298

3 IBISWorld ldquoPetroleum Refining in anada Market Research Reportrdquo NIS 32411CA (Sept 2015)

4 ibid


Inventory of Subject Properties

Large Petroleum R efining Plants in Ontario

The petroleum refining industry in Ontario is highly specialized and for the purpose of this

report 10 plants have been identified The following table contains a list of the petroleum

refining plants in Ontario and is sorted from largest floor area to smallest As noted above

some of the plants are under 125000 square feet

Site Area Gross Floor Roll Number Address Municipality Occupant

(acres) Area (sq ft)

382940004900200 Christina St S Sarnia Imperial Oil Limited 9418 570155

382940005000600 Vidal St S Sarnia Imperial Oil Limited 15009 408940

281033200149000 295 Concession Road 2 Nanticoke Imperial Oil Limited 58064 268627

380522007002400 130 St Clair Pky Corunna Shell Canada Limited 40599 258255

382940005006000 1900 River Rd Sarnia Suncor Energy Products Inc 17730 256987

380522004010200 535 Rokeby Line Mooretown Suncor Energy Products Inc 23907 157979

382940004911500 500 Christina St S Sarnia Imperial Oil Limited 1513 145528

382940005017500 1832 Vidal St S Sarnia Suncor Energy Products Inc 11200 25270


382940004929800 675 Vidal St S Sarnia Imperial Oil Limited 270 3654


Responsibility of MPAC

Role of the Assessor

MPAC has a statutory responsibility to estimate the current value of the fee simple interest in

the land as of January 1 2016 The assessed values will be relied upon to allocate property

taxes for the 2017 to 2020 taxation years

More simply MPAC has an obligation to estimate what a property would realize if it were to sell

on or around January 1 2016

The definition of current value is commonly accepted to represent the concept of value in

exchange

With this in mind it is important to determine how the subject properties would be exchanged

There are three scenarios involving the subject properties that would be considered by the

participants involved in the exchange

continued use of the improvements

alternate use of the improvements

raze the improvements and redevelop the land

This reality is the rationale for determining the highest and best use of the land while

undertaking an appraisal of the subject properties

The subject properties are petroleum refining plants The processes involved with

manufacturing petroleum are highly specialized and the real property is highly integrated with

the dedicated manufacturing equipment- in fact the subjectrsquos design sheer size and

configuration to accommodate this special purpose causes it to not be feasible to adapt much

of the plant to another purpose

As stated above each subject propertyrsquos design prevents alternate uses from being practical

This leaves two potential scenarios under which a subject property would exchange continued

use or razing all or a portion of the improvements to accommodate redevelopment

Analysis contained in this report is based upon the assumption that the current use is highest

and best therefore the value in exchange of the subject contemplates a willing seller and

buyer who each make value judgements based upon the utility derived by the subject property

to manufacture petroleum


Much of this report is intended to stimulate dialogue between assessors and the owners of

petroleum refining plants to ensure that the aforementioned value judgements made by buyers

and sellers are fully understood and appropriately reflected by the assessors deriving the

current values of the subject properties


Appraisal Theory

Highest and Best Use

Overview

The highest and best use of a property may be defined as ldquothe reasonably probable and legal

use of vacant land or improved property that is physically possible appropriately supported

financially feasible and that results in the highest valuerdquo5

This economic concept measures the interaction of four criteria legal permissibility physical

possibility financial feasibility and maximum profitability Estimating the highest and best use

of a property is the most critical component of an appraisal as it sets the valuation context for

the selection of comparable properties and analysis undertaken in the report

Physical Possible Use s

This refers to the legal physically possible uses of the subject that can be accomplished on the

site considering the size shape topography soils and environmental conditions

Legal Permissible Use s

This refers to the possible uses of the subject permitted legally by land use controls any

existing leases easements deed restrictions or subdivision controls covenants and restrictions

or any other public or private limitations

Financially Feasible Use s

This refers to the legal physically possible uses of the subject that will produce a positive net

financial or economic return to the owner of the site

Maximally Productive Use

This refers to the use that satisfies the three criterions listed above and that produces the

highest value

5 The Appraisal of Real Estate Third Canadian Edition (Appraisal Institute of Canada UBC Commerce Real Estate Division

2010) 121


Summary

The highest and best uses of the subject properties are assumed to be the current uses of each

property Each of the properties was in operation as of the date of the report therefore it is

assumed that each of the four criterions has been satisfied

Due to the design of the subject properties there is likely only one use that is financially

feasible

How to Derive Current Value

There are traditionally three approaches to value estimation employed by an assessor the cost

approach the direct comparison approach and the income approach There may not always be

sufficient data for development of all value methods and varying degrees of reliability may be

achieved based on the quality and quantity of data gathered for each approach The process of

value correlation seeks to determine the most representative estimate of value for the subject

property based on the strengths and weaknesses of each approach For complete descriptions

of each of the three approaches please refer to The Appraisal of Real Estate

How to Derive Current Values for the Sub ject Properties

As previously stated in this report there may not always be sufficient data for development of

all valuation methods For most property types there is an active market of sales and leases

that are instructive to an assessor estimating current value however that is not the case for

the subject properties

A dearth of sales precludes the use of the direct comparison approach and a lack of lease

agreements prevents the use of the income approach therefore the assessor is left with only

the cost approach to derive current value

A more detailed explanation for sole reliance upon the cost approach follows

Why the D irect Comparison Approach Was Not Developed

In the direct comparison approach properties similar to the subject that have been sold

recently or for which listing prices or offers are known are compared to the subject

omparable properties ldquoshould have the same or similar highest and best use as the improved

subject propertyrdquo6

6 The Appraisal of Real Estate 711


It is important to note that when large special purpose manufacturing plants transact they are

often repurposed or razed resulting in a change in use

A change-in-use sale involves the sale of a property where the designed and intended use was

no longer viable As a result production had ceased and the plant sits idle A large plant is

expensive to maintain after production has ceased and it becomes a liability as opposed to a

profitable asset this greatly motivates a vendor to part with its property The desire to sell such

a property is usually met with tepid demand the large floor area is frequently much greater

than the subsequent user requires and the capital and operating costs associated with such a

plant is often prohibitive to a purchaser

The opposing motivations of most market participants to a change-in-use sale are the source of

a volatile market As a result if the use of the plant changes after its sale it can no longer be

used for comparison to the subject property

Research did not uncover verified sales of similar facilities from which to draw any conclusions

based on direct comparison

Why the Income Approach Was Not Developed

The income approach to value is based in large part on the appraisal principle of anticipation

which assumes a definite relationship between a propertyrsquos value and the income it produces

The process of the income approach discounts the present worth of the future income benefits

the property will produce during the remainder of its economic life or during a projected term

of ownership

Properties similar to the subject properties seldom if ever trade as an asset that generates a

rental income An investor is unlikely to accept the risk associated with securing and retaining a

tenant to occupy a plant designed to accommodate a sole use large special purpose

manufacturing plants are invariably owner-occupied

Research did not uncover any rental information involving properties similar to the subject

properties

Why the C ost Approach Was Developed

Special purpose business properties such as petroleum refining plants are amongst the most

challenging types of properties to derive current values for This reality is the catalyst for

Recommendation 12 which is contained in the Ministry of Financersquos SPPR


Reviewrdquo7

ldquoThe Province should require MPAC to (a) carry out iterative discussions with taxpayers

municipalities and key experts to develop and disclose the parameters and guidelines for

assessment methodologies and (b) comply with and apply with consistency the agreed-upon

assessment methodologies This process will first be applied to special purpose business

properties considered in the

In the fourth quarter of 2014 MPAC engaged with an independent third party the

International Property Tax Institute (IPTI) to carry out the recommended iterative discussions

with taxpayers municipalities and key experts to develop the guidelines for assessment

methodologies

Following the discussions MPAC composed an assessment methodology guide Assessing

Petroleum Refining Plants in Ontario

This guide states that ldquothe valuation approach to be used for the valuation of large special

purpose manufacturing plants such as petroleum refineries is the cost approachrdquo

MPrsquos conclusion is consistent with guidance from The Appraisal of Real Estate an

authoritative text used by the assessment industry

Although the valuation approach may be agreed upon there are key steps within the cost

approach that require the assessor to demonstrate careful consideration

Assessing Petroleum Refining Plants in Ontario was designed to assist the assessor in navigating

through the process and producing an accurate estimate of current value of petroleum refining

plants utilizing the recognized and approved cost approach methodology

The purpose of this report is to exhibit the data relied upon and the conclusions reached by the

assessor as heshe navigated through the process to produce accurate estimates of current

value for petroleum refining plants throughout Ontario

7 httpwwwfingovoncaenconsultationsparspbphtml_Toc374983299


How the Subject Properties Will Be Assessed

How MPAC Will Derive the Cu rrent Values of the Subject Properties

The guide Assessing Petroleum Refining Plants in Ontario recommends a valuation process

comprising eight steps

1 Evaluate the propertyrsquos functionality (ie what it can do)

2 Evaluate the utility of the property (ie the expected benefits to be derived)

3 Consider how the functionality and utility of the subject property compares to a modern

and efficient property

4 Establish the value of the subject property by using a cost manual ndash MPArsquos utomated

Cost System (ACS) ndash to determine reproduction cost as new

5 Apply a breakdown approach to depreciation whereby each separate element of

depreciation is identified and applied as follows

a If required revise the reproduction cost new to reflect the cost to replace

the improvements

b Apply physical deterioration due to age from the typical depreciation tables

found in the cost manual

c Make adjustments as required to age-related depreciation due to the actual

state and condition of the property

d Apply functional obsolescence as required

e Apply external obsolescence as required

6 Determine the current value of the building(s) and any other site improvements

7 Verify the estimated current value of the improvements using one of the following

approaches

a Compare the total depreciation allowance with other approaches such as

age-life or market extraction

b Verify the current value by reference to market sales of similar properties

8 Estimate the current value of the land and add it to the value of the improvements


Question Answer

Not as well as intended

How well is the subject performing its intended purpose As intended

Better than intended

Why0 ecause0

Why0 ecause0

Steps 1 to 3 in the Va luation Process

The first three steps are completed concurrently and require the assistance of the owner of the

subject property

1 Evaluate the propertyrsquos functionality (what it can do)

2 Evaluate the utility of the property (the expected benefits to be derived)



As a result of concluding that the subject property is special purpose and that the current use is

highest and best the first step in the process is very straightforward ndash the propertyrsquos function is


In order to perform steps two and three the assessor requires the assistance of the owner of

the subject property Evaluating the functionality and utility of a petroleum refining plant

requires a broad understanding of the processes occurring within the plant ndash with few

exceptions this is beyond the scope of an assessor

The assessor must engage with the owner to complete these two steps of the valuation

process The assessor should ask one preliminary question and follow the answer with a series

of subsequent questions that begin with ldquoWhyrdquo The assessor may ask as many subsequent

questions as required in order to understand

The assessor should encourage the owner to compare the existing plant against an ideal or

contemporary plant that could perform the same function when considering hisher answers


This preliminary discussion with the owner will afford the assessor a thorough understanding of

how well the subject property facilitates the manufacturing of petroleum and will help to frame

many of the mathematical adjustments that are made later in the valuation process

Throughout the iterative consultations and during related inspections the owner of the subject

property is encouraged to offer as much insight as possible

Step 4 in the Va luation Process

This step is largely the result of data collection and data entry

4 Establish the value of the subject property by using a cost manual ndash MPrsquos utomated


The data required to estimate the reproduction cost new is collected by the assessor during site

inspection and is often validated by viewing building plans

The primary data collected is

gross floor area of the building(s)

height of the building(s)

type of building materials

quality of building materials

The data is manually entered into ACS MPrsquos proprietary software It is a component-based

cost system where major building components are valued in place which includes all costs

associated with building and installing a particular component Components include

foundations floor structure frame and span exterior base walls and additives roof finishes

partitions interior finishes built-ins electrical plumbing heating ventilation and air

conditioning and fire protection

Component costs including labour material and equipment costs have been normalized

Material costs are considered on the basis of current (base year dates) market costs Labour

costs are based upon typical union labour rates including benefits

The practice listed above is consistent with how an MPAC assessor would derive the

reproduction cost new for any type of building Due to the specialized nature of a petroleum

refining plant and due to recent litigation before the Assessment Review Board involving the

estimation of reproduction cost new of a special purpose manufacturing plant MPAC has opted


to have a third party provide additional data to verify the costs estimated by assessors using

ACS

The additional data was provided by Hanscomb Limited founded in 1957 and one of the largest

cost consulting companies in Canada

Throughout the consultations MPAC will work with the owners and municipalities to validate

the range provided by Hanscomb Limited

Step 5a i n the Va luation Process

This is the step in the valuation process where the assessor must demonstrate sound

judgement and analysis




the improvements

There is a key distinction between reproduction cost new and replacement cost new

Reproduction cost new is the cost to construct an exact replica as of the effective appraisal date

whereas replacement cost new is the cost to construct a modern facility that offers the same

utility as the original improvements

This is a key step in the application of the cost approach because the assessor must discern if

the existing plant would have been replaced by a similar plant as of the effective date of value

or if the replacement plant (often referred to as a model) would have been substantially

different

The determination of the reproduction cost new is largely a factual undertaking whereas the

exercise involving the derivation of replacement cost new may involve some professional

judgement ndash although the existing plant is a tangible entity the replacement plant may be

based upon a hypothetical construct

The differences if any between the cost to construct the existing plant and the cost to

construct its replacement must be reflected in the cost approach

It is important to note that the existing plant reflects the prevailing market conditions when the

plant was constructed A brief overview of the steps involved in designing and constructing a

large petroleum refining plant is as follows


1 Estimate effective market demand for the petroleum product to be manufactured

2 Forecast how much of the market share the company will achieve

3 Design a manufacturing process that will enable the company to fulfill their share of the

market

4 Design and construct a plant to house the manufacturing process

The greater the period of time that passes from the date of construction to the effective date of

value the more likely it is that some of the aforementioned conditions will have changed Any

changes in conditions may result in a replacement plant that differs from the existing plant

Although it is very possible that every plant owner with the benefit of hindsight would replace

their plant differently the most substantial differences would occur when the plants are older ndash

the question is how much older

Not surprisingly there is no definitive answer to this question however there have been two

significant changes in recent history impacting manufacturing companies located in North

America

the North American Free Trade Agreement (NAFTA)

the rise of globalization

NAFTA came into effect in 1994 and globalization can be traced back to the late 1980s and

early 1990s

In addition to the geopolitical influences of NAFTA and globalization there are other changes

that must be considered by the assessor

changes in consumer tastes

changes in manufacturing processes

changes in building design

There is no definitive answer to the question ldquohow much olderrdquo- however due to the

significant geopolitical events and the potential for additional changes that may have occurred

since a plant was constructed MPAC will give more attention to the plants that are 25 years old

or greater


It is beyond the area of an assessorrsquos expertise to opine on how a large petroleum refining plant

would have been constructed on January 1 2016 to reflect the present market conditions

With this in mind MPAC will focus the iterative discussions on plants constructed in 1991 (ie

2016 ndash 25 years) or prior

The consultative process will involve the following steps

1 Identify all plants constructed in 1991 or earlier

2 Notify the plant owner of the critical factors associated with the derivation of the

reproduction cost new (ie gross floor area average building height and type of

construction materials)

3 Ask the plant owner if the replacement plant would differ from the existing plant

4 If the answer is no then MPAC will conclude the existing plant would have been

replaced by a similar plant indicating there are no excess capital costs

5 If the answer is yes MPAC will meet with the owner to determine how the replacement

plant would be different and ascertained why it would have been different

Following the consultation best efforts will be made to validate both the claims made by the

property owner and the cost to construct the replacement as of January 1 2016 estimated by

the assessor

This is a key step in the valuation process because the assessor requires the assistance of the

petroleum manufacturer Throughout the iterative discussion and during the related

inspection(s) the owner of the subject property is encouraged to offer as much insight as

possible

In the absence of shared insight MPAC will analyze trends in the design of petroleum refining

plants to discern if andor how a contemporary plant differs from a plant constructed prior to

1992 If there is no distinguishable trend MPAC will assume that the existing plant would be

replaced with something very similar to what is present and conclude that there are no excess

capital costs

Steps 5b a nd 5c in the V aluation Process

These steps in the valuation process are to account for normal and abnormal wear and tear

b Apply physical deterioration due to age from the typical depreciation tables found in the

cost manual


Line Parameter Formula Details

1 Cost New $1350000

2 Year Built 1993

3 Level of Maintenance Typical

4 Effective Year of Valuation 2016

c Make adjustments as required to age-related depreciation due to the actual state and

condition of the property

Within ACS there are life tables that calculate the loss in value resulting from the normal wear

and tear that buildings and structures suffer from over their estimated useful life It is

important to note that there is a difference between an improvementrsquos useful and economic

life The economic life of a structure is the period over which the improvements contribute to

property value and the useful life is the period over which the improvement is expected to

function according to its design

The useful life is used to estimate physical deterioration

The life tables within ACS do not assign different rates of physical deterioration to long-lived

and short-lived items Instead the varying useful lifespans of the items are blended and the

overall useful life estimation is applied to the entire building or structure

In addition to the useful life determination MPrsquos estimate of physical deterioration is

affected by the effective age of the improvements It is important to note that there is a

difference between actual age and effective age The actual age refers to the time that has

passed since the building was completed The effective age refers to the buildingrsquos condition

and is based on the assessorrsquos judgement and interpretation of the market

The effective age of a structure is impacted by the level of maintenance that it has received If a

structure has been well maintained the effective age may be less than the actual age

conversely if a structure has been poorly maintained the effective age may be greater If a

structure has received typical maintenance its effective and actual age may be the same

An example of the methodology for physical deterioration follows


5 Actual Age Line 4 ndash Line 2 23 years

6 Effective Age 23 years

7 Estimated Useful Life 50 years

8 Remaining Useful Life Line 7 ndash Line 6 27 years

9 MPAC Life Table8 OR 50

10 Percent Good Allotment 54

11 Estimated Physical Deterioration () 100 ndash Line 10 46

12 Estimated Physical Deterioration ($) Line 1 Line 11 $621000

Step 5d in the Va luation Process

This is the step in the valuation process that accounts for any functional obsolescence not

already captured by comparing the reproduction cost new to the replacement cost new


It is difficult to estimate a loss in value resulting from inefficiencies or inadequacies that impair

the utility andor cause the owner to incur excess operating costs In lieu of a definitive

adjustment there are qualitative adjustments made for this type of depreciation the most

common example of this is for piecemeal construction that results in the owner incurring

excess operating costs

In theory a quantitative adjustment to account for a loss in value resulting from excess

operating costs is not difficult The assessor sums the annual excess operating costs and selects

the appropriate discount rate and term to determine the present value of the loss in value

caused by the deficiency

While easy in theory in practice a quantitative adjustment is difficult to account for There is

little difficulty in selecting a discount rate and term however in order to determine excess

8 The useful life tables are contained as Schedule B


costs the assessor must be aware of normal costs Normal operating costs are not within an

assessorrsquos area of expertise and would need to be provided by the owner of the building ndash most

owners are either disinclined to provide such information or find it challenging to discern and

display normal operating costs As a result this method is not easy to implement in a mass

appraisal setting

The qualitative adjustment made to estimate a loss in value resulting from inefficiencies or

inadequacies that impair the utility andor cause the owner to incur excess operating costs

range from 5ndash15 of the replacement cost new The following table illustrates the allotments

made

Actual Age of Plant Allotment for Excess Actual Age of Plant Allotment for Excess

Operating Costs Operating Costs

1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15

The rationale for the sliding scale is that deficiencies become more prominent over the normal

passage of time

Despite the commentary provided above during the consultations MPAC will engage with any

owners willing and able to provide the meaningful information required to complete a

quantitative analysis

Step 5e in the Va luation Process

This step in the valuation process takes into consideration the external factors that influence

current value


There are two subcategories that fall under the heading of external obsolescence

economic obsolescence

locational obsolescence

ldquoEconomic obsolescence is defined as a form of depreciation or an incurable loss in value

caused by unfavorable conditions external to the property such as the local economy

economics of the industry availability of financing encroachment of objectionable enterprises

loss of material and labor sources lack of efficient transportation shifting of business centers

passage of new legislation and changes in ordinances EO also may be caused by a reduced

demand for the product overcapacity in the industry dislocation of raw material supplies

increasing costs of raw materials labor utilities or transportation while the selling price

remains fixed or increases at a much lower rate foreign competition legislation and

environmental considerationsrdquo9

9 Micheal J Remsha and Kevin S Reilly ldquoEconomic Obsolescence Real Life Storiesrdquo American Appraisal (2009)

httpwwwamerican-appraisalcomAA-FilesLibraryPDFEconomicObsolescence-RealLifeSpdf


It is difficult to cite a robust definition of locational obsolescence however as the name

implies it is a loss in value resulting from a location that adversely impacts the utility or

profitability of a property

This report will focus on the estimation of economic obsolescence Any instances of locational

obsolescence will be uncovered and dealt with during the iterative consultations

Although the recommended valuation methodology is the cost approach the assessor must still

have regard for the market

There are two markets to be analyzed when studying industrial real property

ldquoThe real estate market in which industrial properties trade and space in those

properties is leased and occupiedrdquo10

ldquoThe market for the goods produced in industrial facilitiesrdquo11

As previously stated the subject properties are not often traded on the open market ndash in fact

research did not uncover any real estate market data related to the subject properties to be

analyzed

In the absence of real estate market data MPAC analyzed the market for the goods produced

at the subject properties when estimating their current values This analysis involved a review

of financial ratios associated with publicly traded companies involved in the manufacture of

petroleum

The current financial ratios were contrasted against those realized in recent history to gauge

the economic well-being of the companies with the corollary being the state of the market for

the goods produced (ie petroleum) at the subject properties

The financial ratios relied upon as indicators of the state of the market for petroleum are

commodity prices

oil production

total exports

capacity utilization

gross margins

10 Appraising Industrial Properties (Appraisal Institute 2005) 51

11 Appraising Industrial Properties 52


In addition to analyzing financial ratios there was reference made to the industry outlook for

each of the broad categories

Industry Outlook

Following the recent drop in oil prices the petroleum refining industry in Canada is expected t o

suffer a decline in revenue in 2015 however according to IBISWorld continued gro wth in the

US economy will boost demand for industry exports and domestic demand will likely rise given

the growth in industrial production Based u pon our preliminary findings the allotment and

range of economic obsolescence is12

Petroleum Manufacturing Plants

Economic Obsolescence ndash Low Economic Obsolescence ndash High

Nominal 5


This step in the valuation process is the result of subtracting total depreciation from the

reproduction cost new to arrive at the current value of the buildings and other site

improvements


The steps in the valuation process can be converted into the following mathematical equation

Line

1

Step

1

Description Comment

2 2 Data Collection No Mathematics

3 3

(Gross Floor Area of Existing Plant) (Cost 4 4 Reproduction Cost New

New per Square Foot)

12 The entire analysis is contained as Schedule A


5 5A Replacement Cost New (Gross Floor Area of Replacement Plant)

(Cost New per Square Foot)

6 Functional Obsolescence ndash Excess

Capital Costs Line 4 ndash Line 5

7 5B amp 5C Physical Deterioration Line 5 (100 ndash Good in Useful Life

Table)13

8 5D Functional Obsolescence ndash Excess

Operating Costs Line 5 (Qualitative Adjustment)

9 Subtotal Line 5 ndash (Line 7 + Line 8)

10 5E External Obsolescence Line 9 (External Obsolescence Factor)

11 6 Depreciated Value of Improvements Line 9 ndash Line 10

The same valuation process is applicable to the buildings and to the other site improvements

The other site improvements include such items as asphalt paving weigh scales storage tanks

and railway sidings

Steps 7a amp 7b in the Va luation Process

These steps in the valuation process are introduced t o validate the estimate of total

depreciation


approaches


age-life or market ext raction


13 The useful life table is provided as Schedule B


This is a step in the valuation process where the assessor should have reference to petroleum

plants that have reached the end of their economic lives or have been involved in sales

transactions

If there are a sufficient number of petroleum plant closures an assessor can derive an estimate

of economic life and measure depreciation via the age-life method

The age-life method relies upon the assessorrsquos estimates of effective age and total economic

life for the subjectrsquos improvements The depreciation is calculated as a ratio of the effective age

to the total economic life and then applied to the cost new of the improvements

For example if there were a sufficient number of plant closures where the ages at closure

ranged from 38 to 42 years the assessor would conclude an economic life of 40 years

This would indicate an annual depreciation rate of 25 (100 40 = 25) on a straight-line

basis To validate the total depreciation derived via the breakdown method the assessor would

compare the results of each method There may be sufficient petroleum refinery closures to

perform the validation suggested in Step 7a

The market extraction method relies upon the availability of sales from which depreciation can

be extracted The sold properties must be similar in terms of age and utility to the subject and

preferably the sales are current and from the subjectrsquos market area Reliance upon this method

implies that the land value and cost new of the improvements can be accurately estimated

There are not sufficient petroleum refinery sales to perform this validation suggested in Step

7a

As noted above and elsewhere in this report properties similar to the subject properties do

not trade frequently on the real estate market There are not sufficient petroleum plant sales to

perform this validation suggested in Step 7b


This step in the valuation process deals with the determination of the land as if vacant


The land values are derived via the direct comparison approach In short recent armsrsquo length

sales of lands principally zoned for industrial uses are analyzed to determine how much vacant

land traded for in the open market as of the effective date

Land analysis reports will be made available to stakeholders in first quarter 2016


Preliminary 2016 Current Value Parameters

Reproduction Cost New

In preparation for each province-wide Assessment Update MPAC undertakes a review of its

cost estimates As part of this review MPAC retained Hanscomb Limited to provide 2016

sample cost estimates for the various special purpose property sectors in the form of a range of

reproduction cost new per square foot MPrsquos review is ongoing and considers input from

stakeholders as critical to this process This includes cost considerations such as indirect costs

economies of scale and the cost of foundations on which machinery and equipment rest

Replacement Cost New

The preliminary position advanced in this report is that any petroleum refining plants

constructed prior to 1992 (ie at least 25 years old) should be more closely examined to

determine if the existing plant would be replaced with a plant that would be significantly

different

As previously noted there is no definitive age to rely upon as a firm benchmark therefore the

assessor will also examine the more modern plants if the owners make sufficient information

available for review

This will require extensive input and assistance from the owners of the subject properties

The most helpful information that an owner can share with the assessor are examples of

existing plants elsewhere in North America (and possibly beyond) that offer the same utility as

the subject property In order for the assessor to complete hisher research heshe will need to

know (at least) the size and character of construction of the contemporary plant along with the

production capacity

Functional Obsolescence ndash Excess Capital Costs

This step in the valuation process is to establish the difference if any between the cost to

construct the existing plant and the cost to construct a replacement plant that offers the same

utility

Physical Deterioration

The initial allotments for physical deterioration are based on the assumption that all of the

subject properties are realizing normal maintenance If that is not the case it would be


Actual Age of Plant Allotment for Excess Operating Costs

0 to 9 years 0 to 5

10 to 19 years 5 to 10

20 to 29 years 10 to 15

30 years or greater 15

beneficial for the owner of the subject property to alert the assessor of any instances of

abnormal maintenance

The useful lifespan of the buildings is believed to be 50 years ndash in general this produces an

annual depreciation rate of approximately 2 The occurrences of petroleum refining plants

that were constructed in the 1950s and 1960s that continue to operate appear to validate this

belief however MPAC is willing to discuss the issue further if the owners believe this lifespan is

too long

Functional Obsolescence ndash Excess Operating Costs

The preliminary adjustments made to account for excess operating costs are qualitative in

nature ndash they are identified in the following table

As stated the adjustments are qualitative ndash MPAC is willing to consider quantitative

adjustments if the owner is willing and able to share meaningful data to assist with the process

External Obsolescence

The preliminary allotment to account for external obsolescence ranges from nominal to 5

This conclusion is the result of contrasting current financial indices against those realized in

recent history along with an interpretation of what the trends represent

MPAC is willing to consider additional indices to obtain a more fulsome understanding of the

health of the petroleum refining sector


Parameter 2012 2016 Comments

Cost New per Square Foot

Excess Capital Costs


Excess Operating Costs


Land Values

Please refer to Schedule C for $75 to $85 $100 to $125

additional information

Nominal to Nominal to This parameter will be site

Significant Significant specific

An increase of approximately 8 over the 4-year period is due to the

passage of time and the associated wear and tear realized by the

buildings

Historically MPAC capped this

Maximum of 15 adjustment at 5 Property

Maximum of 5 depending on the owners indicated this was too

age of the plant low therefore MPAC has

revised its position

Due to changing market

0 0ndash5 conditions there may have

been a slight decline

Industrial land rates will

be released for consultation with

stakeholders and ndash ndash

industry during Level 3

disclosure

Comparison Between 2012 and 2016 Current Value Parameters

The following table illustrates the change in parameters between the two valuation dates and

the replacement cost new per square foot rates and assumed allocations for the sector These

are averages and rates may differ based on the actual use of the property


Steps an Owner Can Take to Help an Assessor

Property Inspections

MPAC will be conducting inspections of the subject properties on an as-needed andor as-

requested basis

Prior to the inspection MPAC will estimate the time required and identify the number of

participants attending It would be very helpful for the owner to advise the assessor of any

special safety equipment that is required to complete the inspection

Additional Information

In order for an inspection to be productive the owner should be prepared to set aside some

time to discuss the plant with the assessor prior to entering the manufacturing area ndash it is often

too loud in a manufacturing area to have a meaningful conversation and there are often

distractions involving lift trucks and manufacturing equipment which can impair an exchange

of information

The initial discussion should focus on the manufacturing process and how well it is integrated

with the plant This discourse can shine light upon the following issues

Has the process changed ndash if yes how well do the existing buildings integrate with the

process

Are there bottlenecks ndash if yes where and why

Are there areas in need of repair ndash if yes where and why

Are there recent renovations ndash if yes where and why

Knowing then (ie when constructed) what you know now ndash what would you build and

why

With the benefit of an introductory discussion in a setting more suitable for dialogue the

assessor will be better equipped to address the aforementioned issues

The following additional useful information that could be shared with an assessor before or

after an inspection is

Identifying any contemporary plants elsewhere in North America and sharing as much

information as possible about the aforesaid plants


Recent construction costs for new plants andor additions to compare against the cost

rates provided in this report

Recent closures of petroleum plants in North America along with the dates the plants

opened and closed

Financial benchmarks and indices that would help the assessor gauge the performance

of the subject property andor the entire petroleum refining sector

Recent appraisals of the subject properties (regardless of the purpose)

Iterative Discussions

After the benefit of an inspection and additional information the assessor will be in a much

better position to estimate the current value of a subject property However the assessor may

need to seek clarity from the owner during hisher analysis of the new information as a result

there may be a need for continued communication (electronic telephone or in person)

between the parties

Your patience and consideration will be instrumental in enabling the assessor to undertake the

difficult task of estimating the current value of a complex business property

Next Steps

MPAC will begin consultations on preliminary values for 2016


CANADIAN UNIFORM STANDARDS OF PROFESSIONAL

APPRAISAL (CUSPAP) COMPLIANCE

Client and Intended Users

The client and intended users of the report are the valuation personnel of the Municipal

Property Assessment Corporation the owners and occupants of the properties described

herein and the municipal and provincial levels of government

Intended Use of the R eport

The intended use of the report is to describe the analysis and explain the steps taken to derive

the 2016 current value assessments for the properties described herein The report will not

address the current values on specific properties rather it will provide an overview of the

valuation process for petroleum refining plants in Ontario

Purpose of the R eport

The purpose of this report is to share and discuss the data parameters and calculations that

MPAC relied upon to determine the assessed values for all petroleum refining plants in Ontario

Real Property Interest Appraised

The legal interest being appraised in this report is the current value of the unencumbered fee

simple estate Fee simple is defined as absolute ownership unencumbered by any other

interest or estate subject only to the limitations imposed by the four powers of government

taxation expropriation police power and escheatrdquo14 The owner of a fee simple interest has the

right to sell occupy lease or mortgage the property

Definition of Value

The assessment of land in Ontario is based on its current value urrent value is defined as ldquothe

amount of money the fee simple if unencumbered would realize if sold at armrsquos length by a

willing seller to a willing buyerrdquo15


15 Ontario Assessment Act


Effective Date of Value

The effective date of valuation is January 1 2016

Date of the R eport

The date of the report is January 31 2016

Ordinary Assumptions

The values established in this report are based on the following ordinary assumptions

Reliability of data sources

Compliance with government regulations

Marketable title

No defects in the improvements

Bearing capacity of soil

No encroachments

No site contamination exists

Due diligence by intended users

Ordinary Limiting Conditions

The values established in this report are based on the following ordinary limiting conditions

Denial of liability to non-intended users and for any non-intended use

Conclusions may be valid only i n connection with the proceedings resulting from the

appeals

Responsibility denied f or legal factors

No environmental audit was undertaken

Report must not be used partially

Possession of report does not permit publication


Any cost estimates are not valid for insurance purposes

Value conclusion is in Canadian dollars

Denial of responsibility for any unauthorized alteration to a report

Validity requires original signature

Extraordinary Assumptions

The current use of the properties complies with applicable zoning by-law regulations and is

considered to be a legal non-conforming use Subject to rare exceptions the mass appraisal of

the subject properties is based upon the extraordinary assumption that the current uses of the

properties are highest and best

Extraordinary Limiting Conditions

An extraordinary limiting condition has not been invoked in this report

Hypothetical Conditions

A hypothetical condition has not been invoked in this report

Jurisdictional Exception

A jurisdictional exception has not been invoked in this report

Certification

I certify that to the best of my knowledge and belief

The statements of fact contained in this report are true and correct

The reported analyses opinions and conclusions are limited only by the reported

assumptions and limiting conditions and are the personal impartial and unbiased

professional analyses opinions and conclusions of MPAC

I have no present or prospective interest in the properties that are the subject of this

report and no interest with respect to the parties involved

I have no bias with respect to the properties that are the subject of this report or to the

parties involved with this assignment


My engagement in this assignment was not contingent upon developing or reporting

predetermined results

My engagement in and compensation for completing this report is not contingent upon

the cause of the client the amount of the value opinion the attainment of a stipulated

result or the occurrence of a subsequent event directly related to the intended use of

this appraisal

The analysis opinions and conclusions were developed and this report has been

prepared in conformity with the Canadian Uniform Standards of Professional Appraisal

Practice

I have not made personal inspections of all the subject properties that are the subject of

this report

Malcolm Stadig MRICS CAE ASA MIMA

Manager Advisory Services


January 31 2016

The Municipal Property Assessment Corporation (MPAC) has published Market Valuation

Reports for the following industries

bull aerospace manufacturing

bull mining operations

bull chemical manufacturing

bull food processing

bull oil refineries

bull pharmaceutical manufacturing

These Market V aluation Reports share sector level market an alytics and are intended to provide

clarity and transparency as to how property types in the above mentioned industries will be

assessed for the 2016 province-wide Assessment Update MPAC reserves the right to amend

the Market Valuation Reports as appropriate Updates will be posted on wwwmpacca

Antoni Wisniowski Rose McLean MIMA President and Chief Administrative Officer Chief Operating Officer


Acknowledgements






mining operations


food processing

oil refineries





City of Thunder Bay

Town of Espanola

Township of James


City of Mississauga

Town of Marathon

City of Sarnia

City of North Bay

St Clair Township

City of Cambridge


City of Toronto


City of Guelph

Town of Milton

Town of Oakville


Region of Durham

Town of Ingersoll

County of Oxford

City of Brampton


City of Brampton

City of Guelph

Matachewan Township

Greater Sudbury

Tembec


Aditya Birla

Domtar


Goldcorp Canada Ltd

Unimin Canada Ltd


Primero Mining Corp

Imperial

Suncor

Shell Canada

Altus Group

Nova Chemicals

Gerdau Corporation

ASW Steel Inc


Taylor Steel




DJ Glavanizing






US Steel Canada Inc


Sanofi Pasteur

GlaxoSmithKline

Purdue Pharma




Honda Canada Inc





Canadian Mist


Arnprior Aerospace








Ryan ULC

MinsterLaw


Altus Group Ltd




Equitable Value Inc


Aird amp Berlis LLP


Yeoman amp Company


Conway Davis Gryski

Kingmont Consulting




Table of Contents

ACKNOWLEDGEMENTS 2

INTRODUCTION 7


8









APPRAISAL THEORY 15



















NEXT STEPS 37







builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




Acknowledgements






mining operations


food processing

oil refineries





City of Thunder Bay

Town of Espanola

Township of James


City of Mississauga

Town of Marathon

City of Sarnia

City of North Bay

St Clair Township

City of Cambridge


City of Toronto


City of Guelph

Town of Milton

Town of Oakville


Region of Durham

Town of Ingersoll

County of Oxford

City of Brampton


City of Brampton

City of Guelph

Matachewan Township

Greater Sudbury

Tembec


Aditya Birla

Domtar


Goldcorp Canada Ltd

Unimin Canada Ltd


Primero Mining Corp

Imperial

Suncor

Shell Canada

Altus Group

Nova Chemicals

Gerdau Corporation

ASW Steel Inc


Taylor Steel




DJ Glavanizing






US Steel Canada Inc


Sanofi Pasteur

GlaxoSmithKline

Purdue Pharma




Honda Canada Inc





Canadian Mist


Arnprior Aerospace








Ryan ULC

MinsterLaw


Altus Group Ltd




Equitable Value Inc


Aird amp Berlis LLP


Yeoman amp Company


Conway Davis Gryski

Kingmont Consulting




Table of Contents

ACKNOWLEDGEMENTS 2

INTRODUCTION 7


8









APPRAISAL THEORY 15



















NEXT STEPS 37







builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




City of Brampton

City of Guelph

Matachewan Township

Greater Sudbury

Tembec


Aditya Birla

Domtar


Goldcorp Canada Ltd

Unimin Canada Ltd


Primero Mining Corp

Imperial

Suncor

Shell Canada

Altus Group

Nova Chemicals

Gerdau Corporation

ASW Steel Inc


Taylor Steel




DJ Glavanizing






US Steel Canada Inc


Sanofi Pasteur

GlaxoSmithKline

Purdue Pharma




Honda Canada Inc





Canadian Mist


Arnprior Aerospace








Ryan ULC

MinsterLaw


Altus Group Ltd




Equitable Value Inc


Aird amp Berlis LLP


Yeoman amp Company


Conway Davis Gryski

Kingmont Consulting




Table of Contents

ACKNOWLEDGEMENTS 2

INTRODUCTION 7


8









APPRAISAL THEORY 15



















NEXT STEPS 37







builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report





Honda Canada Inc





Canadian Mist


Arnprior Aerospace








Ryan ULC

MinsterLaw


Altus Group Ltd




Equitable Value Inc


Aird amp Berlis LLP


Yeoman amp Company


Conway Davis Gryski

Kingmont Consulting




Table of Contents

ACKNOWLEDGEMENTS 2

INTRODUCTION 7


8









APPRAISAL THEORY 15



















NEXT STEPS 37







builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




Table of Contents

ACKNOWLEDGEMENTS 2

INTRODUCTION 7


8









APPRAISAL THEORY 15



















NEXT STEPS 37







builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report










NEXT STEPS 37







builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




builtrdquo1

Introduction



education taxation







applied immediately





















r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




r otherwiserdquo2

iqueness arising fr








purpose






in scope










(SPBPAR)









Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report






Market Valuation 2

Reports

Property Specific 3







municipalities

























parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report








parties



useful life table







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report







petroleum refining

Petroleum Refining












page








4 ibid





























exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report































exchange



























Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report









Appraisal Theory


Overview




















highest value


2010) 121


Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




Summary





feasible












































of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report























of ownership






properties






Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




Reviewrdquo7









methodologies






























the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report

















the improvements









approaches






Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




Question Answer




Why0 ecause0

Why0 ecause0



subject property


















































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report



































ACS











the improvements








different














market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report







market










America




early 1990s









or greater


















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




















the assessor




possible





capital costs




cost manual



1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report





1 Cost New $1350000

2 Year Built 1993























































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report

































appraisal setting




made



1 0 16 8

2 1 17 8

3 1 18 9

4 2 19 9

5 2 20 10

6 3 21 10

7 3 22 11

8 4 23 11

9 4 24 12

10 5 25 12

11 5 26 13

12 6 27 13


13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report




13 6 28 14

14 7 29 14

15 7 30 15


passage of time






current value






























analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report

















analyzed




petroleum





commodity prices

oil production

total exports


gross margins






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report






Industry Outlook








Nominal 5




improvements



Line

1

Step

1

Description Comment


3 3










Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report









Table)13








and railway sidings



depreciation


approaches








transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report






transactions

















7a
























different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report
















different









production capacity




utility






0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report





0 to 9 years 0 to 5


20 to 29 years 10 to 15








too long



















Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report










Land Values







buildings













disclosure









requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report







requested basis









of information




process





why











opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report







opened and closed









between the parties



Next Steps























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report
























Definition of Value









Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report






Date of the R eport






Marketable title



No encroachments







appeals





















Certification
















this appraisal



Practice


this report



















Certification
















this appraisal



Practice


this report









this appraisal



Practice


this report




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